ECB (European central bank) lowered their interest rates levels by 25 basis points yesterday down to a base rate of 2.5%. This did not come as a surprise, as markets had it priced in. Moving forward for the European central bank, it’s likely that we will see two additional rate cuts taking place in the first half of 2025, currently predicted for April and June. Disinflation suggest that inflation levels are coming down at a consistent pace and while the job market is uncertain, recent data suggest that job vacancies are falling in the euro zone – which could levitate unemployment levels further.
There has been a lot of uncertainty for the markets recently from a political standpoint with threats for tariffs taking place from the US on a number of countries. We have seen the USD fallen throughout the week, with GBP and EUR taking large advantages. Today we do have non-farm payroll, jobs data, being announced from the US. Non-farm payroll being one of the most volatile data releases and a weakening USD – today’s data will be of very high importance. If we see a slower job market, we can see a continuing downfall for the greenback. Expectations is that US will produce an additional 160k new jobs, compared to its previous month of 148k. We did see earlier in the week, Wednesday to be exact – another indices for jobs in the us, ADP-figures, coming in at the halfway point of expectations. This meant there was roughly 75k job less created than what was forecasted. If we would see a similar pattern for non-farm payroll today, we can see a strong sell-off of the USD.
GBP/EUR 1.1892 GBP/USD 1.2922 GBP/AED 4.7480
GBP/AUD 2.0469 GBP/CHF 1.1333 GBP/CAD 1.8480
GBP/NZD 2.2565 EUR/USD 1.0853 GBP/ZAR 23.3862